Aircastle receives USD530 million in support for A330 financing

Aircastle received (11-Jun-2010) approvals from the European Export Credit Agencies (ECA) to support up to USD530 million of debt financing for seven new A330 aircraft. The support relates to two A330-200Fs scheduled for delivery to an affiliate of the HNA Group, parent of Hainan Airlines, in 2010 and five new A330-200s scheduled for delivery to South African Airways during 2011. Additionally, Aircastle announced that it has received a commitment from Sumitomo Mitsui Banking Corporation for up to USD250 million in ECA-supported debt financing for the first three A330-200 deliveries to SAA in 2011. Aircastle is currently in discussions with banks concerning financing for the other SAA and the HNA aircraft. [more]

The USD10 billion deal will create the world’s third largest lessor - and they may be more to come yet.

Avolon itself was only recently acquired by HNA Group, with the USD2.7 billion purchase agreement being finalised in Jan-2016, via Bohai Capital Holdings.

Avolon is now the core aircraft leasing brand for the HNA Group. Including assets from Hong Kong Aviation Capital, Bohai Capital and several smaller HNA Group leasing firms, Avolon has a fleet of nearly 250 aircraft and almost 200 more on order.

An agreement between China and the UK to more than double their air service agreement is good timing for both sides. Chinese airlines are finding an imbalance: they are taking delivery of widebody aircraft and more Chinese airlines are flying long haul but traffic rights to major markets – the US, Canada, Germany and France – are becoming depleted. Negotiations to add traffic rights have not succeeded, typically due to the foreign side being concerned about accessing Chinese slots or Russian overflight rights.

The agreement with the UK to expand the number of weekly passenger flights from each side from 40 to 100 reflects considerable pragmatism on the part of the UK: British Airways and Virgin Atlantic are not growing in China, and China is a large growth opportunity. The UK has lagged on Chinese tourism. It was only in 2015 that China became the UK's largest inbound market.